Reply to: Flying as a Contractor - tax relief?

[speling bee]

LOL, thats sly. They will do your accounts as you advise i.e. is it a business trip, you say yes they do the numbers knowing full well at the end of the year you sign away all their responsibility. Cheeky.

Accountants advise. The company director takes responsibility. Nothing wrong with that.

[northernladuk]

My accountant has advised, if you wish we will support you, which isn't exactly a shining beacon of "go ahead chap" and they have advised that sufficient information from the organisations in the UAE "should" (and that word was stressed) be sufficient.

LOL, thats sly. They will do your accounts as you advise i.e. is it a business trip, you say yes they do the numbers knowing full well at the end of the year you sign away all their responsibility. Cheeky.

[mudskipper]

If you privately fund part of it then you are admitting there is a duality of purpose. The business either pays all or nothing. Also look at the scale rates for accommodation and subsistence in other countries. There are quite generous allowances that you may be able to claim....

WHS - if it's a business trip, then claim all expenses as a business trip. As soon as you start to pay for bits of it yourself, you're muddying the waters.

Is it a business trip? Or is it a holiday during which you happen to have a couple of meetings?

[Wanderer]

I see a good cogent debate regarding this trip which I will fund primarily out my own pocket, hotels, food etc as I dot want to go too far in "justifiability".

If you privately fund part of it then you are admitting there is a duality of purpose. The business either pays all or nothing. Also look at the scale rates for accommodation and subsistence in other countries. There are quite generous allowances that you may be able to claim....

[EpsilonPS]

Regardless of everything else, if you're likely to be exporting your services you might want to contact UKTI. They gave me £thousands for a similarly speculative business trip to the USA a couple of years back.

Interesting, tell me more....

[EpsilonPS]

I'd say you can argue this either way since they've done business before.

It could be a legitimate chance of scoring new business and extending a customer relationship that could be worth x00,000s for the OPs Co, in which case £2K is easily justifiable and whatever presentation materials and due dilligence the OP does will demonstrate this to HMRC.

Or it could be a weekend on the pop with some old mates from a previous client who are now working somewhere hot and sunny. This is also justified by the same emails/powerpoint etc but highly dodgy.


Only the OP knows which it is and will mostly likely hear the one positive 'yes' as clear as a bell above the noise of a hundred 'no' replies.

Apparently this provoked the same debate in my accountants today between partners. I think they are like yourselves, 50/50 as to whether or not it is "justifiable". As for potential return, I'm on a 7hr flight in cattle which cost £400, a return Glasgow to London can set you back that.

I don't see the one clear yes, I see a good cogent debate regarding this trip which I will fund primarily out my own pocket, hotels, food etc as I dot want to go too far in "justifiability". I do need to meet the clients face to face as its interviews for myself and possibly my business partner for a 6month contract, estimated turnover in six figures. However like all interviews/tenders/business opportunities, until I sit down and have a contract it's worth bugger all as you all well know.

My accountant has advised, if you wish we will support you, which isn't exactly a shining beacon of "go ahead chap" and they have advised that sufficient information from the organisations in the UAE "should" (and that word was stressed) be sufficient.

As I see it, three options 1) pay personally 2) use business, win contract no issues 3) use business, HMRC says no and I repay.

Yet to decide - but hell, loving the debate!

Best,
Liam

[Platypus]

Cant see HMRC being happy though.

So you claim for a trip to Dubai? Surely the first thing they're going to ask is what business did you get out of this huge expense then?

If you can point out that spending £1000 has now gained you £100k of business the fair enough.

But think about it. Would a small business at home risk £1000 in this way on something else with the small possibility that they 'might' get business. Debatable.

Isn't taking risk an indicator that you're a real business, according to the new tests?

But swanning off to Dubai does look dodgy IMHO.

Not saying it cant be genuine its just that its going to attract HMRCs attention and you need to be ready to justify it.

I disagree. It's claimable and justifiable.

"Swanning off" - long haul travel isn't my idea of a fun time, it's a total PITA.

It would be nice, but not essential, to get an email or letter from the client saying "it was good to meet you". And collect a few business cards while you're there to demonstrate networking.

That my 2 cents.

[BlasterBates]

If you have some documentation that proves there is a meeting then it's a business trip. e.g a letter confirming the meeting. It doesn't matter where it is.

I would talk to your accountant. But basically if this is a business trip, then provided it's justifiable within the realms of your business and there is satisfactory evidence HMRC have no choice but to accept it.

Having said that I could imagine that maybe a simple letter, for example, might not be sufficient, they may possibly want to see some more evidence. The fact that you then go ahead and do a project would be ample. Other than that I don't know, maybe some business proposal. That's maybe where it might get rejected. An accountant would know. Lets put it this way, a one off trip to Dubaih which leads to no business from a contractor who works exclusively in the UK is less likely to be accepted than a contractor who has regular work in foreign countries.

[Notascooby]

As Dr Pepper famously said..."What's the worst that can happen?" You claim, sometime in the future you get investigated (this one item just gets rolled up with everything else - you can't tell if its a single trip or 6 months working away from home) they say eerm hang-on this doesn't look like an exclusive business trip, you now owe us £X.

OK Hector, here's your £X sorry.

Done deal

Its not like it's 10 years of EBT that they're asking for.

To quote Mr Nike "Just Do It!"

[Pondlife]

I'd say you can argue this either way since they've done business before.

It could be a legitimate chance of scoring new business and extending a customer relationship that could be worth x00,000s for the OPs Co, in which case £2K is easily justifiable and whatever presentation materials and due dilligence the OP does will demonstrate this to HMRC.

Or it could be a weekend on the pop with some old mates from a previous client who are now working somewhere hot and sunny. This is also justified by the same emails/powerpoint etc but highly dodgy.


Only the OP knows which it is and will mostly likely hear the one positive 'yes' as clear as a bell above the noise of a hundred 'no' replies.

[prozak]

That's bollocks I am afraid. The world has moved on since that type of thinking. It's not totally gone I agree and multimillion pound pieces of work could hold true. One a one man PSC? No chance. They will appreciate the value to effort isn't worth it so in some cases VC is perfectly acceptable.

So you close all your business without a face to face?

Well done to you.

I've always had to meet my prospective customer at least once.

[speling bee]

That's bollocks I am afraid. The world has moved on since that type of thinking. It's not totally gone I agree and multimillion pound pieces of work could hold true. One a one man PSC? No chance. They will appreciate the value to effort isn't worth it so in some cases VC is perfectly acceptable.

That may be your business approach and good luck to you. It may not be my business approach. I may prefer to risk some money to make a better impression and to connect face to face with the potential client. Not sure what the taxman has to say about any of this.

[d000hg]

Evening,

Been reading these boards for a while now, been working as a contractor for about 6 months now, all is going well so far - I however have the chance to do some work in the UAE; excuse the daft question but couldnt find the answer anywhere....

If I am going to Dubai for a potential business opportunity, I stress the word potential, can I look to put the cost of the flight through the business? It is a meeting with a company I have dealt with in the UK and may have a role for me out there but certainly not guaranteed? I am a LTD company and wanted to book the flight this evening, but only just thought of the question and clearly my accountant is now closed!

Thanks for any help you guys can offer.

Thanks
Liam

Regardless of everything else, if you're likely to be exporting your services you might want to contact UKTI. They gave me £thousands for a similarly speculative business trip to the USA a couple of years back.

[northernladuk]

I could argue the other way.

Face to face wins business.

Video or Teleconf tells them you aren't that serious about building a relationship and don't see them as important enought for a face to face meeting.

That's bollocks I am afraid. The world has moved on since that type of thinking. It's not totally gone I agree and multimillion pound pieces of work could hold true. One a one man PSC? No chance. They will appreciate the value to effort isn't worth it so in some cases VC is perfectly acceptable.

[prozak]

OK. Look at it another way.

Multi-national business turning over millions. Blowing £1000 on the slim chance of getting a huge contract = acceptable.

Small business turning over say £100-£200K spends £1000 = more difficult to argue that it was an acceptable business decision.

Less than 1% of yearly revenue is a good risk in my opinion. Especially if the meeting could turn into more than 1 year or the opportunity sounds like you could bring in sub contractors.

10% of revenue is another level and maybe not as easy to justify.